In India, there are a number of people who are plagued by debts arising from credit cards and loans. This affects their savings and puts a strain on the monthly budget. In such a scenario, a debt consolidation is considered one of the best bets.
A number of lenders including NBFCs (Non-Banking Financial Institutions) offer loans for debt consolidation at very attractive affordable interest rates. The biggest advantage here is that it betters your credit score and a chance to clear out all existing loans with better interest rates. This decreases the chances of defaulting on a loan payment.
Working people opt for many kinds of loans including home loans, car loans, and educational loans. Apart from these, there are also credit card dues which need to be paid. As a result, many times, it gets rather difficult to keep track of these. If the payments are being made from bank accounts, then adequate balance needs to be maintained because on defaulting a heavy fine is imposed.
In such a scenario, Debt Consolidation Loan is the best solution. Some of the ways in which debt consolidation loan is beneficial are as follows -
1. Single Payment
Instead of making multiple payments to various lenders, you can take a single loan to pay off all your existing debts. A debt consolidation loan offers a longer tenor and thus the EMI amount reduces significantly.
2. Stress Reduction
A number of debts can take a toll on your mental well being. As such, consolidation of all your existing debts can help you manage them better and manage them better.
3. Lower Interest Rates
Different loans mean varying rates of interests which means more monthly expenditure in terms of installments paid. A debt consolidation loan, on the other hand, can offer lower interest rates and longer tenor which means lesser monthly installments.
4. Better Credit Scores
If you pay off your dues on time, then your credit score will only get better with time. This is one of the biggest hidden advantages of opting for a debt consolidation loan.
Additional Read: What is the Best Way to Pay off your Debts?
If you are searching for a lender for loan consolidation, then there are a number financial institutions financial help like bajaj finserv personal loans for the same purpose at great interest rates. For more information, visit a website of a few such lenders for more information.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.